maquiladoras - INT 365 Maquiladoras In 1965 the Mexican...

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4/14/2008 INT 365 Maquiladoras In 1965, the Mexican government introduced the Border Industrialization Program, which contributed to the establishment of maquiladoras along the U.S.-Mexico border. This program was implemented in the hopes of encouraging industrialization along the border, while attracting foreign investment and reducing unemployment rates along the Mexican side of the border. The program created an export-processing zone, giving foreign corporations incentives to build assembly plants. Because of this, foreign companies were permitted to establish these plants in Mexico, in which parts and materials were imported duty free, and were only forced to pay export taxes on the value added. Although this may seem beneficial to the Mexican economy, the “maquilization” of Mexico has not only resulted in the growth of the maquila sector at the expense of other sectors but has also detrimentally affected many maquiladora laborers, the environment, and in some cases entire populations. During the 1980s and 1990s, transnational corporations began establishing new maquiladoras at an increased pace. After the introduction of the North American Free Trade Agreement in 1994, the pace continued to grow as other sectors in the economy remained stagnant, or plummeted. The rapid growth of the maquila sector, can be traced to this time of economic liberalization. Beginning in the1960s and 1970s, Mexico sought rapid economic growth through import-substitution industrialization; however, in turn developed an unsustainable current-account deficit, high inflation, and much foreign debt. Because of this, the indebted government was forced to seek an International Monetary Fund loan. Shortly after, the government entered a borrowing and spending binge after discovering 72 billion barrels of oil in
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maquiladoras - INT 365 Maquiladoras In 1965 the Mexican...

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